Could see downgrades on poor June quarter performance
Dish TV stock continues to be under pressure falling a further 3% on the back of a disappointing performance in the June quarter. The stock shed over 8% on Friday. Analysts are likely to rework their estimates given June quarter numbers which were below expectations both on the operating profits level as well as on the bottom line where then company posted higher losses.
While higher content/programming costs as well as advertising expenses saw its EBITDA fall 22%, margins tanked nearly 900 bps at 21%. Given a large chunk of its costs on the satellite, transponder and maintenance as well as debt is dollar denominated, the sharp depreciation of the rupee only added to its woes. All this translated to higher losses for the company. While the bottomline was down 6% over the year ago period, it was down sharply by 30% to Rs 30 crore sequentially.
The company on its part says that the focus now is squarely on improving its profitability and with that in mind it has increased its tariffs both on the set top box as well as subscription fee. While subscription fee was hiked earlier in the quarter, set top box costs were increased this month. The company is looking at adding better quality subscribers and keep churn rates low. Given that new users are subsidised, higher entry costs and lower churn rates help cut the losses.
Some of these initiatives are paying off with free cash flows jumping 120% on a sequential basis to Rs 48 crore. With higher internal cash flows as well as cash at hand, the company is planning to reducing its debt by Rs 750 crore in the current fiscal through internal accruals.
Dish TV stock continues to be under pressure falling a further 3% on the back of a disappointing performance in the June quarter. The stock shed over 8% on Friday. Analysts are likely to rework their estimates given June quarter numbers which were below expectations both on the operating profits level as well as on the bottom line where then company posted higher losses.
While higher content/programming costs as well as advertising expenses saw its EBITDA fall 22%, margins tanked nearly 900 bps at 21%. Given a large chunk of its costs on the satellite, transponder and maintenance as well as debt is dollar denominated, the sharp depreciation of the rupee only added to its woes. All this translated to higher losses for the company. While the bottomline was down 6% over the year ago period, it was down sharply by 30% to Rs 30 crore sequentially.
The company on its part says that the focus now is squarely on improving its profitability and with that in mind it has increased its tariffs both on the set top box as well as subscription fee. While subscription fee was hiked earlier in the quarter, set top box costs were increased this month. The company is looking at adding better quality subscribers and keep churn rates low. Given that new users are subsidised, higher entry costs and lower churn rates help cut the losses.
Some of these initiatives are paying off with free cash flows jumping 120% on a sequential basis to Rs 48 crore. With higher internal cash flows as well as cash at hand, the company is planning to reducing its debt by Rs 750 crore in the current fiscal through internal accruals.
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